Thursday 20 November 2008 07.44 EST
First published on Thursday 20 November 2008 07.44 EST

European legislators should consider new laws to prevent the theft of virtual goods, according to a report published today.

The position paper, produced by a group representing industry, government and the academic world, puts forward a number of suggestions to help the European Union deal with the rapid growth of virtual worlds such as Second Life and World of Warcraft.

With more than 1 billion registered accounts in online worlds — many of which make money through the sale of virtual goods and property — the threat of fraud and theft is growing, the report suggests. It says that while 30% of all users have lost something of value, often as a result of criminal activity, only 25% subsequently recovered the items — with laws and procedures for dealing with such situations often fuzzy.

"While annual real-money sales of virtual goods is estimated at nearly €1.5bn (£1.2bn) worldwide, users can do very little if their virtual property is stolen," said Giles Hogben, editor of the report. "They are a very soft target for cybercriminals."

According to the report, the mismatch requires governments and financial institutions to collaborate over better procedures and regulations — similar to the changes made when e-commerce became popular in the late 1990s.

It also identifies a number of other risks that it believes could become increasing problems for the creators and users of virtual worlds – including the danger to privacy and computer security, as well as online harassment and the need for child protection.

Without consideration of the legal situation inside virtual environments, such growth could have serious impact, it says. In Asia, where massively multiplayer online games have had a huge following for years, a number of high-profile court cases have arisen following in-game disputes.

In 2005, 41-year-old Chinese gamer Qiu Chengwei was sentenced to death for the murder of Zhu Caoyuan, 26 – after alleging that the younger man had stolen an item from him in the game Legend of Mir III. Last month, a Japanese woman was charged after destroying data belonging to her online "husband" in the popular game Maple Story. She faces up to five years in jail or a fine of more than £3,000 for manipulating electronic data.

"This is a serious issue," says the report. "The failure to recognise the importance of protecting the real-money value locked up in this grey zone of the economy is leading to an exponential increase in attacks targeting online MMOs and virtual worlds."

The study was produced by the European Network and Information Security Agency (Enisa), an EU organisation focused on improving the security of the continent's information and communications networks.

Contributors included leading academic Richard Bartle, creator of the first virtual world and a professor at the University of Essex, and Ren Reynolds, founder of the Virtual Policy Network.

The panel also included representatives from Pegi, the pan-European game ratings system, and the creators of popular Finnish virtual world Habbo.